Capturing the value of environmental impact and sustainability in pharmaceutical health technology assessment

The healthcare sector is responsible for a substantial share of global carbon emissions, contributing approximately 4-5% of total global greenhouse gas emissions.

This is heavily driven by the improper disposal of medical products and manufacturing pollutants. Despite the United Nations’ focus on the adoption of sustainable practices, and integration of sustainability information into big business, Health Technology Assessment (HTA) bodies have not incorporated these factors into new product evaluation.

For the first time, in November 2023, podium presentations at the International Society of Pharmacoeconomics and Outcomes Research (ISPOR) in Copenhagen, Denmark articulated how environmental impact should be included in HTA, articulating a future of HTA that includes sustainability. Efforts to reduce environmental impact are evolving towards holistic, long-term sustainable practices to meet ambitious emissions reduction targets.

The current landscape of sustainability in healthcare

Scandinavian nations have historically excelled in sustainability efforts, so it’s logical that sustainability would be a focus of a global health economics conference in Denmark as they lead from the front. Examples of national sustainability measurement programs in healthcare abound across the bloc; Norway, as an example, took considerable steps towards sustainability through the Norwegian Hospital Procurement Trust (Sykehusinnkjøp HF) in 2019, implementing criteria to diminish the environmental impact of pharmaceutical products. Between 2020 and 2022, they initiated eight pharmaceutical procurement processes, each incorporating environmental requirements.

Leveraging Norway as a model, the pharmaceutical sector requires sufficient motivation to prioritise sustainability. The five main incentives within the pharmaceutical industry to promote sustainability are:

  1. Government regulations,
  2. Tax incentives,
  3. Grants and funding,
  4. Public perception, and
  5. Market access.

Government regulations are in place to some degree across major, industrialized nations; tax abatement and grants/funding have proven to be successful incentives in broader contexts, such as with the Federal Energy Police Act (USA), which provided tax incentives to motivate the investment of renewable energy, and Horizon Europe (EU), which granted billions for green and sustainable projects. Incentives will be essential to stimulate long term investment to address issues that have an equally long-term impact. This positions HTA to be the entity which evaluates and rewards firms for their stewardship when they achieve those incentives.

The future of sustainability in healthcare

Environmental impact in Healthcare is anticipated to increase significantly in importance in the coming years. Payers expect that the likelihood of sustainability playing a role in pharmaceutical market access will increase in the next 5 years (Jens Greuger, ISPOR), and research by Mansinho et al. suggests the United Kingdom, a leading country in pharmaceutical value appraisal, is expected to spearhead the prioritization of environmental considerations in their HTA process.

Different methods of incorporating environmental considerations into value assessments have been proposed in literature. These approaches involve including additional metrics in cost-utility and cost-effectiveness analysis such as carbon dioxide emissions (CO2e) relative to the patient, or Quality-Adjusted Life Years (QALYs), or Life Years (LY) or, Incremental Cost-Effectiveness Ratio (ICER) threshold, or Health-Related Quality of Life (HRQOL) (Tsantila et al.). Other proposed solutions suggest a cost-benefit analysis based on willingness-to-pay per CO2e, or per QALY.

To effect meaningful global change — and avoid implementation divergence and challenges across markets — common methodologies for estimating environmental footprint need to be established. Standardized processes for data collection and quantification are needed across all HTA authorities. All HTA bodies also must have minimum, parity skills in the interpretation of environmental data and impact assessment.

What successful sustainability stewardship looks like in health

There is a broad, internal consensus that sustainability is critical; in the health care sector, it is also agreed that sustainability should be included more formally in HTA value assessment frameworks.  

The movement toward decarbonization progress is increasing, emphasizing the need for appropriate regulations. It is essential to go beyond quick solutions and address issues that have a long-term impact. HTA is the entity with the expertise and the impact to govern and reward sustainability.

Successful sustainability stewarship position the pharmaceutical industry favorably and is congruent with the mission of the organizations, which largely focus on building a healthier world. If ISPOR 2023 was any indication, Pharma is well on the way to implementing solutions.